CRM Benefits for Customers : Literature Review (2005-2012)

Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 6, November- December 2012, pp.1578-1586

CRM Benefits for Customers : Literature Review (2005-2012)

Nastaran Mohammadhossein*, Dr.Nor Hidayati Zakaria Author**

*(Department Of Computer Science And Technology, UTM University, Malaysia) ** (Department Of Computer Science And Technology, UTM University, Malaysia)

ABSTRACT

CRM is a strategic approach that integrates people, business and technology to understand the needs of customers to be more satisfied. Customers are the vital key for each business and company to help them to grow. So, implementing CRM applications is one of the important tools that will help managers and companies to increase the satisfaction and loyalty of customers more than before. Beside this, there are some benefits which will affect on customers after implementing CRM. These benefits will help the customers to become happy and pleasant of using the companies that is offering their product and services from using CRM facilities. In this study, we find eight benefits of CRM which are important and beneficial for customers such as improve customer services, increased personalized service, responsive to customer's needs, customer segmentation, improve customization of marketing, multichannel integration, time saving, and improve customer knowledge. We reviewed previous studies, and identify these benefits which will affect on customers. Our result will help the managers and companies to know and recognize the factors and benefits of CRM which are more significant for their customers. So they can increase their customer's satisfaction and retention by more attention to these benefits.

Keywords - CRM, BENEFITS, CUSTOMER

I. INTRODUCTION

Customers are the critical factors in each business. In all companies, the loyal and the fixed customers are expecting more level of service qualifications, suitable transaction, and customized products. So it means that the companies should be informed of each customer to increase the loyalty and effectiveness. For this reason, CRM systems can help to change the way that each company is treated with customers and employees, to promote its revenue and obtain higher final profit. Nowadays, organizations are implementing Customer Relationship Management (CRM) applications more and more because CRM will help them to achieve a range of business benefits [1-2].

Moreover, Implementing CRM will consider as a set of information processes and

technology tools for enterprises that enable the firm

to expand its customer relationship management

[3]. It will raise the firms ability to earn profits and

generate higher-quality products or services. Based

on Gartner explanation, CRM is a business strategy

designed and implemented to help the firms and

companies to know and foresee the requirements of

their potential and obtainable customers. Discover,

attract, and find new clients and customers are the

vital aim of the CRM. Pay attention and be

responsible about those customers which are the

loyal customers, attract previous customers for

come to the company again, and lessen the cost and

money of promotion; marketing and customer

service are also goals of the CRM [4]

According to Winer [5] "this revolution in customer

relationship management...has created a worldwide

market for CRM products and services of $34

billion in 1999, a market that is forecasted by IDC

to grow to $125 billion by 2004." While there is a

huge investment in CRM implementation , still

there are many CRM initiatives that fail to

understand their proposed benefits [6] .

Although CRM has a huge impact on the

firms and organizations, there are some advantages

and benefits of implementing CRM which have a

direct impact on the customers, and will bring

customers satisfaction and improving retention of

customer. Assessing and finding the benefits of

CRM is a vital aspect of managing [7]. These

benefits will help the firms to find out the way that

increase effective relationship with customers and

finally will profit firms. Some studies classified the

benefits of CRM in terms of operational,

organizational, strategic, IT infrastructure, and

managerial. In our study, we want to find out the

benefits of CRM for the customers. Since the

customers are the critical key for each organization,

they will have a huge impact on making profit and

sales.

Considering that some of the effects of

CRM are multi-dimensional faceted, the objective

of this paper is to have literature review about the

CRM benefits. The CRM benefits will affect on the

customers needs and acquiescence that could be

extensible. Also the results can be comparable

across time, different systems and contexts.

.

II. CUSTOMER

RELATIONSHIP

MANAGEMENT (CRM)

In a general Customer relationship

management (CRM) is a business strategy, which

aims is acquiring new customers and retaining

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Research and Applications (IJERA) ISSN: 2248-9622

Vol. 2, Issue 6, November- December 2012, pp.1578-1586

current customers to increase competitive

improving customers satisfaction. There are a

advantages. CRM helps firms preserve relationships

numbers of studies which have explored the

with customers that are directly connected

different aspect of CRM, such as CRM benefits.

competitive compensation. The basis of CRM is

Recently, some researchers are classified the CRM

relationship marketing, which aims are improving

benefits based on Shang and Seddon ,,s (2002)

the long-term profitability of customers through

enterprise systems benefit frameworks [6-7].

moving away from product-centric marketing to

Although this studies are very efficient in extracting

customer-centric.

the benefits of CRM, but still there is a lack of

More and more, firms understand the

CRM framework benefits which present the CRM

worth of establishing close relationships with

benefits from customers point of view. Considering

customers to growing retention. According to

customer as an end user who is interacting as an

Khalid Rababah [8] Knowing customers, will

external user with CRM applications, will help to

enable firms to serve them better and keep them

take out those benefits which are related to

loyal forever. This is the main theme of Customer

customer. Therefore, through reviewing the past

Relationship Management (CRM). Therefore ,

literatures, it is possible to find and extract those

Defining CRM is necessary for increasing and

benefits that are important for customers.

developing a clear perceptive and vision of what

CRM means to a business and organization while

III. CRM BENEFITS

the lack of such obvious understanding is

There are some problems regarding the

considered as an obstacle to successfully implement

benefits of CRM ,David [21] , as Managers did not

CRM [9].

know what kind of advantages the CRM system will

The CRM concept is used widely in

brings to a company. So management should have

cooperation of perform and research, while not for all time without fail [6] and also , Rigby [10]

at least the basic understanding or knowledge about CRMs benefit. The following lists of CRM benefits

[10][9][9][9] states that the majority of executives

are selected and minimized from a wide range of

can not immediately define CRM. Therefore, here

survey from latest CRM studies.

we present some definition to describe the meaning

With CRM systems customers are served

of CRM.

better on day to day process and with more reliable

In the other definition ,CRM is the

information their demand of self service from

combination of marketing efforts, business

companies will decrease. Therefore if there is less

processes and technology which will lets the firm

need to contact with the company for different

to know and recognize its customers from numerous

problems, customer satisfaction level increases [22].

perspectives [11].

Through Implementing CRM Companies can

In addition, a number of studies define

remove confusion that exists in the productivity,

CRM more holistically and they attempt to define

efficiency and control and every level through

CRM through its association with technology, and

appropriate use of CRM (Rushforth, 2007).

also as a business strategy [12-15].

In recent findings, the list of benefits will

On the other definitions , Kincaid [16]

be considered as a critical connection among CRM

defined CRM as a strategic tool that use of

initiatives and growth of customer equity. These

information, processes, technology, and community

central benefits of CRM will be connected

to handle the customers relationship with the

hypothetically to the three kind of equity that are

company departments such as marketing, sales,

relationship, value and brand, and in the end to

services, and support, during the customer life

customer equity[2]. Eight core benefits were

cycle, and Buttle [17] quoted that "CRM is an

recognized to provide value drivers.

integration of technologies and business processes

1. Enhanced ability to target profitable customers

used to satisfy the requirements of a customer

2. Integrated assistance across channels

throughout any given interaction. CRM involves

3. Enhanced sales force efficiency and effectiveness

achievement, analysis and exploit of knowledge

4. Improved pricing

about a customer to sell more goods more

5. Customized products and services

efficiently".

6. Improved customer service efficiency and

In the other literatures , CRM is defines as

effectiveness

an opportunity to increase profit, attracting and retaining "economically valuable" customers

7. Individualized marketing messages

though removing "economically invaluable" ones

CRM system helps companies to keep and record

[18-20].

the customer information, like their goals, needs

Consequently, by looking towards the CRM

and events. Moreover, saved knowledge is updated

definition, it is clear that satisfying the needs and

into the CRM system, so that the customers

requirements of customer is an important and

information will be up to date without being

significant part of CRM. Also, one of the vital

outdated. With these connections the information is

goals of firms through implementing CRM is

always expands in the CRM system that enhances

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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering

Research and Applications (IJERA) ISSN: 2248-9622

Vol. 2, Issue 6, November- December 2012, pp.1578-1586

the profile data for customers and works like a

Dimension

Reference year

strong instrument in making business decisions [23].

Improves

customer [27]

segmentation and assessment

2005

Greenberg [24] stated that through developing the total lifetime value of customer, CRM can raise the true economic worth of a business. Moreover successful CRM strategies promote customers to purchase more products, stay loyal for longer periods and be in touch effectively with a company. Curry and Kolou [25] quoted some benefits and reasons for adoption of CRM :

Customers from the competition will desire come your organization, Simplify customerfocused internal organization will make simpler the

Enable communication

through multiple selling

channels

The ability to gather [28]

customer data

identify the most valuable

customers and increase

customer retention is highly

desirable

learning

from

customers(customer

knowledge)

2005

infrastructure, decrease the workflow and remove non-productive information process, and Profits will increase from more satisfied customers and more integrated focused company.

Since adopting CRM will provide a lot of benefit in firms and their process, it would be helpful to clarify results and benefits of implementing CRM for them. Therefore, they will have a good background about the results and incomes from using CRM applications.

As we mentioned above, most of the previous studies on customer relationship management (CRM) focused mainly on exploring

Deliver the right product [29] and service in the right time from the right channel Channels for customers to give feedback Produce personalized and customizable product and services Institution of customer trust in CRM systems Information use and [6] capture

2005 2005

CRM benefits from organizational and managerial

Better

personalized

point of view, and there is a few studies that

service

specifically concentrate on customers point of

Being more responsive to

view. However, finding this benefits and reinforcing

customer requirements

them in the company will affect on the satisfaction

Closer relationship to its [30]

2006

of the customers. We had reviewed some of the

customers and offer phone

previous research and studies since 2005 to 2012

services

which were about the CRM and its benefits. It will help to find the benefits which are critical for customers. For this reason we reviewed around 60 papers and select those studies that were mentioned benefits of CRM for customers too. Because of the limitation of our domain search, only 15 papers were recognized that were exactly mentioned and discussed about the CRM benefits from customers sides. Of course, these studies and others had mentioned some other benefits of CRM form other views but, here we focused on the benefits which are for customers only.

Servicing customers and

receive information to

develop the level of service

offered to customers

Target

commercial [2]

customers

Offerings from different

channels

Enhanced

customer

service

Customized products and

services

2006

Advance responsiveness [31]

2009

Accelerate delivery lead-

times

Enable

customer

knowledge management

Develop

customer

Table1 : CRM customers benefits

Dimension

Reference

Enhanced customization [26]

of services and product

offerings

year 2005

segmentation Targeting the most profitable customers Improve product and business innovations

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Research and Applications (IJERA) ISSN: 2248-9622

Vol. 2, Issue 6, November- December 2012, pp.1578-1586

Dimension

Reference year

Dimension

Reference year

Enhance customization of

communication

marketing efforts and

Customized products and

messages to individual

services;

customers

Improved

customer

Permit multi-channel

service efficiency and

integration

success

Allow multi-channel

Identify and target their [38]

2012

communication

best customers

Enable

personalized

Allowing the formation of

products and services

individualized relationships

Improve

product

with customers

separation

Identifying the most

Focus on customers and

profitable customers and

their needs

providing them the highest

Provide customers a

level of service

"one-to-one" skill

Understand and identify

Personalized services

[32]

2009

customer needs and

Customers knowledge

and experience empowered

Deliver high quality

IV. CRM BNENEFITS FOR CUSTOEMRS

service

According to the above table, and reviewing the

Meet

customer

needs(personalization)

Employee empower more

time to serve up customers

Advanced satisfaction

ratings

Targeted product and

service contributions can be

previous studies, we selected some of this benefits which are more significant in customers satisfaction. We summarize them into the following cases: Improve customer services Increased personalized service or one to one

service Responsive to customers needs

timed to match with

Customer segmentation

customer actions and

Improve customization of marketing

requirements

Multichannel integration

Individualization

of [33]

2010

Time saving

market

Improve customer knowledge

Customization of product

and services

According to table1 this benefits rate and

Improved responsiveness [34]

2010

frequency can be seen in the following fig1 .

Valuable time savings

during reduction of the

search effort

Seamless communication

Enhancing customers [35]

2011

attentiveness

Consolidating helpful

services

Describe

diverse [36]

2011

customer groups that will be

served in different ways

Customer service and

support service operations

Predict potential and personal customers behavior Improved capability to [37] target profitable customers Integrated contributions across channels Individualized marketing

2011

Figure1 : CRM customers benefits frequency Based on table1, we find the most repeated benefits for customers and tried to show the frequency of these benefits in fig 1. Based on this classification we can see these eight benefits frequency and numbers of repeat in these fifteen studies from customers point of view. So it is important to

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Nastaran Mohammadhossein, Dr.Nor Hidayati Zakaria / International Journal of Engineering

Research and Applications (IJERA) ISSN: 2248-9622

Vol. 2, Issue 6, November- December 2012, pp.1578-1586

know and discuss about the vital benefits of CRM

produce a more satisfactory transaction, and over

that will impact on customers. For this reason,

time, a more satisfactory relationship. Personalized

having an overview about these dimensions will

service should simply be better service than routine

help the companies to know this importance.

service that does not take the individual's needs into

account."

A. Improve Customer Services

With a Personalize service companies

Customer Service is a communication

concentrate on what the customer desires to buy

among a customer and the company, frequently by

more than what the company wants to purchase.

usual channels like phone or email. Regularly the

Therefore, one to one service is a strategy to meet

customer will have a concern or request that wants

the customers needs and helps them to become

resolving. CRM services provide a business with

happy through providing personalize service.

the ability to produce, allocate and manage requests

made by customers. For example, Call Center

C. Responsive to Customer's Needs

software, which helps to connect a customer to the

CRM is not only application of

manager or person who can best assist them with

technology, although it is a strategy to study more

their existing problem, is one of the CRM abilities

about customers' needs and requirements to

that can be implement in the firms and

implement powerful relationships with them.

organizations. Recognizing and using of this type of

Customer responsiveness is providing customers

service can help to the companies to improve their

what they deal to obtain, nothing more, and nothing

clients knowledge to improve customer services

less. CRM is a strong tool to help the companies to

and also can increase efficiency and minimize costs

focus more proactive on their customer

[39].

responsiveness. CRM contains gathering

Personalized services, identify and reward

information about customers to discover better ways

profitable customers, creating and scheduling

to satisfy their needs.

appointments with customer, customization of

Focusing on customer needs and

marketing efforts and sending messages to

requirements, take the relationship one step further.

individual customers , providing multi-channel

It shows that companies can understand their

communication , and More responsive to customer

customers situations and needs [42]. Its the right

needs are some of the CRM applications ability

of each customer to want the companies for foresee

which can impact on customer service quality [6-7,

what will bring value to them through finding and

40].

addressing their unknown wants and needs. And,

A business with high service quality will

these unknown wants and needs must then be

satisfy customer needs while is remained

changed into new products and services. For this

economically competitive. Improving customer

reason, CRM is a significant tool that will help to

service quality is one of the important achievements

the companies to know and find the needs of their

of using CRM in each company. Based on Freeman

customers, and be responsible about them [43-45].

& Seddon [6] the major reasons for these

improvements were; information access and capture

D. Customer Segmentation

,increased personalized service , and being more

Segmentation is in center the process by

responsive to customer needs.

which objects or items are categorized or classified

into groups that split similar characteristics.

B. Increased Personalized Service (one to one

Although these characteristics, can be one or more

service)

attributes. It can be defined as a subdividing the

One-to-one service is about individuals

popularity based on already known good

and personalization. Communicating with, selling,

discriminator. In CRM , segmentation is used to

and servicing individuals by providing a particular

categorize customers according to some similarity ,

and significant personal experience can be

such as industry [46].

considered as personalize services. One-to-one

There are many techniques for classifying

service is an ability and skill of understanding a

and segmentation, but in this research we just want

customers needs and requirements by asking

to focus on the benefits of segmentation for

questions and listening to their answers, in addition

customers. Three ordinary group of segmentation

to observing their actions.

variables in consumer markets are demographics,

Therefore, personalize customer service or

psychographics and behavioral characteristics, like

one to one service provides companies to improve

loyalty status or benefits required.

understanding and knowledge about the customers

Segmentation or target marketing moved a

that the company cares about them and also to have

companys attention to balancing products and

better knowledge about their customers'

marketing efforts to be according customer needs.

preferences, requirements and wants.

Firms need to describe slighter and smaller

According to Dwayne Ball [41] " The rationale

segments to find customer needs and preferences

makes common sense: personalization should

[47]. Therefore, customers can be segmented to

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Research and Applications (IJERA) ISSN: 2248-9622

Vol. 2, Issue 6, November- December 2012, pp.1578-1586

groups based on ages, gender, demographic and etc.

channels and incorporate it with other related

Though this, CRM will provide a capability of

information [52].

dividing customers based on their needs. It will help

companies to categorize their customers according

G. Time Saving

to their requirements into similar groups. CRM

Faster and quicker time to market is

application will facilitate the process of

significant to organizations looking for a

segmentation for companies.

competitive edge. It is also critical for customers to

have a fast respond in sale process from the

E. Improve Customization of Marketing

company and do not waste their time in buying

Customization of marketing means that,

process or product delivery. Organizations can take

the company or organization adapt and change its

benefit of CRM capabilities that simplify the

services or products based on presenting a unique

development and deployment cycle to respond to

product or services for each customer.

the customers. CRM systems bring in functionality

With the purpose of ensuring that customer needs

and enhancements, more quickly, at lower cost and

and requirements are met Customization is used by

enabling IT to be more responsive to business

the organization[48]. Firms can invest in

needs.

information gaining about customers and then

One of the useful benefits of using a CRM

customize their products as best as they can to

system is reduction in using paper in the company

contest customer interests.

or during interacts with customers. All processes

Moreover, communication can be

that were done by forms and paperwork can be

customized with customers for improving the

virtualized and mechanized within a CRM solution.

product or services for a specific customer. As the

Not only this process can save time and money

ability of CRM to customization of the services,

spent on paper, but it also makes a firm more

Customization of services and products is one of the

environmentally-friendly with customers.

benefits of CRM for customers [49].

CRM systems can store and organize every

detail of each individual and customer and easily

F. Multi Channel Integration

retrieval them. Sell person or employee can save the

Nowadays, the range of Customers channel

time of themselves and customers for searching

choice is changed and therefore, a winning CRM

about the information. In addition managers and

need to more efficiently manage customer

marketers of the company can better analyze

relationships inside a multichannel environment.

customer behaviors and trends in less time and then,

Technology, customer potential, and competitive

perform more systematic research about the

forces, are more and more convincing local

companys customer base and product

companies and firms to support customer service

offerings. CRM will let companies to interact with

operations from some delivery channels as much of

customers more frequently, by personalized

the customer knowledge occurs within this channel

massage and communication way which can be

environment.

produced rapidly and matched on a timely basis,

The multichannel integration development

and finally they can better understand their

has a important responsibility in CRM since it takes

customers and therefore look forward to their needs

the result of the business strategy and value-creation

[53].

processes and change them into value adding

communications with customers [50]. Multi-

H. Improve Customer Knowledge

channel integration can maintain all three phases of

Tracking customer behavior to customer

CRM which are acquisition, extension and

tastes and needs is a motivation for a firm to

retention. According to Goersch [51] multi-

implement CRM systems. Firms can make and

channel customers are more loyal and spend more

develop enhanced products and services through

than other customers. It is also valuable for retailers

using this information [54].Since Customer

that connect in CRM. Multi-channel integration is

knowledge is changing rapidly CRM applications

good for a transactional marketing approach, where

help organizational improve their knowledge about

retailers are just interested in effective customer

the customers by analyzing purchase behavior

achievement. Therefore, CRM strategy may needed

through different channels of the customers

all three phases to be implemented, multi-channel

customer [55]. CRM systems give a competitive

integration residue valuable although just one or

advantage in improving firms collection of

two goals are obtained [51].

customer information to customize product and

Multichannel integration shows the point

services according to customer needs.

of co creation of customer value in CRM. On the

According to Sunil Mithas [55] "Customer

other hand, a companys skill to perform

relationship management applications help firms

multichannel integration successfully , is heavily

gather and use customer knowledge through two

dependent on the organizations ability to collect

mechanisms. First, CRM applications enable

and bring together customer information from all

customer contact employees to record relevant

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